As 2019 moves forward, retailers are finally starting to see some of the practices and technologies they lined up last year roll out. And with these updates, they’re also learning how to use these innovations to get consumers excited and bring fun back to shopping.
“2018 was all about re-platforming,” said Erik Sultmanis, business development specialist at Tulip. “The technical debt caught up to retailers, and a lot of companies had to reassess how they were approaching tech on the back end.” The next year, Sultmanis said, will focus more on the customer-facing side, and particularly in marrying high-tech e-commerce experiences with intimate and engaging in-store interactions.
Speaking from the Shoptalk expo floor in Las Vegas last week, Craig Morris, vice president of strategy and product management at DHL eCommerce Americas Engagement, said creating a personal, pleasurable experience can give retailers a leg up on even their fiercest competitors.
“Online marketplaces are becoming vital to commodity goods,” Morris said.”Because they’re so good at it, the focus is shifting to the brand on the other side of that equation, and what they do for the consumer.” Large companies like Amazon, Morris said, have the convenience of commodities down pat, but have sapped enjoyment from shopping in doing so. “Amazon has become the digital Walmart,” Morris said.
Raj Badarinath, vice president of marketing and ecosystems at Rich Relevance, expressed a similar sentiment.
“In the push to remove ‘bad friction’ from the online shopping experience, Amazon and a lot of other e-commerce sites have totally eliminated the joy of shopping,” Badarinath said. But retailers can introduce “good friction,” in the way of curatorial AI tools or personalized delivery settings that can heighten consumers’ sense of involvement of their own purchases.
One example is crafting a continuous customer profile from store to store and retail shop to web shop.
“We’re clienteling to a global customer now,” Sultmanis said, explaining consumers who have a history with a brand should never be treated as a new customer. “We’re designing continuous customer journeys, from store to store and platform to platform.” The challenge in making that journey fluid from storefront to home page comes from making consumers feel seen and heard in the e-commerce space. As counterintuitive as it may seem, Badarinath said, AI is the key to making consumers feel human.
“If you can use AI as the means to an end, and not position it as the end objective, you can replicate a personal, curated in-store experience online,” said Badarinath. On average, consumers use 2.2 words per search. That’s not a lot of information: a search on ShopBop for “black jeans” can return both a $98 pair of Levi’s and a $345 pair from Rachel Comey. AI tools like natural language processing can help retailers understand shoppers’ intentions, said Badarinath, and even predict their future shopping habits. That intelligence is vital in an online environment, where there’s no store associate to gauge consumers’ responses to particular pieces or help them narrow down what they’re looking for.
According to Morris and Sultmanis, AI won’t be the only tool that generates revenues in 2019. This will likely be the year smaller companies and individualized retail solutions hit their stride.
Morris gave the example of localized logistics companies that are taking the reins in the last mile of deliveries. “The companies that succeed will be flexible enough to work with multiple carriers, like niche and city couriers or even crowd-based companies,” he said. “You can leverage technology to allow rate-shopping, and to not be hindered by legacy systems.”
Flexibility and niche providers will be big in all parts of the supply chain, not just logistics. “Retailers are finally focusing and seeing where they should prioritize their efforts,” Sultmanis said, adding that retailers are much more likely to upgrade their technology piecemeal than to take on a total overhaul. “You’ll see a lot more partnering with providers that can solve one pain point really, really well.”
The culture around technology seems to be shifting, too, said Badarinath. While some retailers are still apprehensive about technology, most have realized that embracing digitized inventories or machine learning can open up new doors. “Technology is under the hood—it’s an engine,” Badarinath said. “Retailers care about getting from point A to point B. All they need is to understand how your engine can let them create a memorable experience for customers and have them keep coming back.”